Should I sell my rental?

[Jake Fumagalli]

Recently I’ve been contemplating selling my rental property. It is paid off and the only purpose of selling would be to put a downpayment on a bigger property with more units. Is it worth selling a paid off property? It’s nice to have the cash flow yes, but I feel like I could do even better by advancing with a bigger property

[Joe Villeneuve]

You are 100% correct in selling.

Too many investors look at the property as the asset.  It's not.  The asset is the equity and CF from that property, and the equity has no true value until you access it...which means sell.  Until it's the cost you are paying for that property...much like the $5k deposit you have to keep in a checking account to get free checking (what a joke).  That $5k is a cost to you.  In both cases, you may own that equity (or $5k), but the property and the bank controls it.  That means, in both cases, the equity and the $5k has no real value to you...unless you sell.

100% equity means you have paid 100% for the property, and you bought a property value equal to your cost.  20% equity means you only paid 20% for the property, and your PV is 5 times what you paid for it.  If you sell that 100% equity property, you can turn it into a 20% property and convert the value back into 5 times what it was when it was dead.  Your total equity doesn't change.  What changes is the location.

...and, your cash flow should increase dramatically.